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Genetic Technologies Limited Message Board

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    • you should be an analyst

      maybe you are

      great analysis


    • Excellent analysis of the company situation, thanks.

    • The Aussie shares have been trading on high volume since the beginning of the year. Most of that had to do with the optimism following Australia's failure to pass legislation banning certain patents related to uncoded DNA - that would have killed GTG.

      And in case you haven't noticed by the headlines, the company's primary business and biggest revenue stream is suing everyone against it's IP portfolio in the U.S.

      That accounts for around $10M a year and licensing will probably continue to make more money for the company this year than the BREVAGen rollout. Since the company has consistently lost money, everyone got excited that something (the lawsuit) was finally going to put them in the black.

      BREVAGen (their breast cancer prognostic test) really hasn't been that big of a deal up until this year - the stock didn't soar anytime after they bought the business from Perlegen for $1.5M a year or so ago. It's not the first or only prognostic test in the U.S. - it has just been heavily tested and has a pretty good classification rate vs. the others.

      A lot of people are just applying a terribly over-simplistic logic that this must be the first/only test for breast cancer and has/will have no competitors, has some kind of magical accuracy and will be used by all doctors for all breast cancer testing. Some of that is partially true, but it's not quite the instant money machine some people think.

      The second largest population BREVAGen is targeting are abnormal biopsy patients with an indeterminate risk, about 1M a year. BREVAGen can reclassify about a quarter of them as a high-enough risk to be treated. But GTG isn't marketing the test for that population until year 2 of the rollout, around 2012. The largest population will be women >35 concerned enough about risk to be tested - that group will be targeted in year 3, or 2013.

      The current target market (the rollout and remainder of this year) will be to doctors that perform BRCA tests that show negative results. That patient population is more like tens- or hundreds-of-thousands (vs. the 1M indeterminate biopsy population). There are only about 1,500 doctors that have these kind of patients. Revenue from BREVAGen this year may be a few million, but nothing like tens or hundreds of millions.

      The tests are really just a combination of clinical risks and genetic risks that GTG has identified as significant. They look for specific markers, but it's regular DNA testing. There's nothing special about the test itself. So the question is whether anyone else will come up with a better / more accurate / cheaper test that's just as good or better.

      If nobody else can *ever* come up with a better test and are willing to pay for GTG's, than GTG will make a fortune. In a year or two, who knows? There may be a better test that comes along that has nothing to do with genetic testing, or someone may identify an even better set of markers than GTG or a cheaper way to do it.

      I'm not saying GTG doesn't have great potential, but consider it in the same light as other biotechs. There's no reason this would go to $20 or even $10 anytime soon other than on pure hype. And I'm pretty sure they will make more money on lawsuits and licensing this year than BREVAGen will earn for them.

    • That's the reason behind tomorrow's too.

4.14+0.01(+0.24%)May 22 4:00 PMEDT